Mattel's legal fees

How much? Good question. The El Segundo-based toymaker, which reported its first quarterly loss in more than three years, has been hit with a slew of litigation expenses. They involve last year's run of product recalls and an intellectual-property dispute with rival MGA Entertainment over ownership of the popular Bratz dolls. Mattel claims that a former doll designer illegally sold designs for the doll to the privately held company. Van Nuys-based MGA has filed a counterclaim. The case goes before a jury next month. Mattel executives clearly don't want to talk about the higher legal costs, other than they represent half the $37.5 million increase in selling and administrative expenses. What about a number? Wachovia analyst Tim Condor was asking during a conference call, but Mattel CFO Kevin Farr was having none of it.

Conder: Could you give us a little more color the legal expenses, the breakdown between, you mentioned the MGA ongoing suit there and then also the related to the recalls and how do you see somewhat those expenses going forward?

Kevin Farr: I’m not going to be able to give you more color on the legal expenses other than say that half of the increase related to SG&A did relate to litigation matters. We believe expenses will be ongoing for future quarters until these matters are settled.

Conder: Should we see them at the type of rate or pace that we did in the first quarter?

Kevin Farr: We’re not going to project those. I think what we are doing is we are making investments and legal expenses and we’ll make the appropriate investments as these legal matters progress through the year. That’s all the guidance we are going to give you.